The Madurai bench panel of the Madras high court ordered notice to the secretary of GST council on Friday about the case looking for GST exclusion on footwear esteemed beneath Rs 500. E Liyahath Ali, secretary of Chappal Bazaar Association has filed the petition, which has come up before equity G R Swaminathan.
Clarifying the difference between VAT and GST in the footwear business, the applicant’s direction told the court before the beginning of the GST, VAT was in-charge of the tax regime. According to the earlier tax system, there was no VAT on footwear valued below Rs 200. But, the VAT on the unbranded footwear worth more than Rs 200 was 4 percent and while for the branded footwear that valued more than Rs 200, it was 12.5 percent.
Additionally, he also said that the footwear industry in the country is divided into many parts, footwear with the basic value (below Rs 200), footwear for mass valued (Rs 200 to Rs 700), mid/economy valued (Rs 700 to Rs 1,000), active sports valued (Rs 1,000 to Rs 3,000), premium valued (Rs 3,000 to Rs 5,000) and luxury valued (above Rs 10,000).
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The large part of the population residing in the state belongs to poor and working class who utilize footwear underneath Rs 200, for whom VAT exception was valuable as it had been to footwear vendors. Apart from this, VAT had functioned as a hardship for the manufacture Rs to settle down the rate of the footwear that is below than Rs 200. But now, the GST deleted the Lakshman Rekha which helped settle the rate past Rs 200 with no obstruction.
Also, previously the VAT had forced dissimilar expenses on unbranded and marked things. However, the GST regarded both as one bringing about multinational brands have begun offering inconvenience to local manufacturers delivering unbranded items. After the hearing, the judge requested notice and dismissed the case.
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